[UPDATE 3] In a press release, EA has now officially confirmed that it is laying off 1,500 employees as part of a general restructuring. In a conference call with analysts, CEO John Riccitiello said that as of September 30, the company had 8,820 employees, meaning it is letting 17 percent of its global payroll go.
The reorg will also see the publisher "provide greater focus on titles with higher [profit] margin opportunities." As a result, Riccitiello said "over a dozen" games had been canceled, although he did not identify any specific titles.
"Anything that doesn't measure up to be in a very high profit contributor and unit seller got cut from this point going forward," said the CEO.
The reorganization, which is set to be complete by March 31, will result in the "closure of several facilities," although no specific studios were named. After taking restructuring charges of between $130 million and $150 million, the company expects to save $100 million per year as a result.
The layoffs come just nine months after EA cut its payroll by 11 percent, or 1,100 employees. Then, the company said it was also planning to "narrow its product portfolio," close a number of facilities, and eliminate certain other costs. As a result, EA Black Box's offices were closed, and the shrunken studio was relocated to EA Canada outside Vancouver.
[UPDATE 2] Mythic Entertainment was apparently particularly hard hit. Unconfirmed reports estimate that over one third of the EA-owned, Virginia-based shop was laid off following disappointing sales of its massively multiplayer online role-playing game Warhammer Online. The layoffs come just months after studio head Mark Jacobs departed following a reorganization of all of EA's RPG studios, which now report to BioWare cofounders Ray Muzyka and Greg Zeschuk.
[ORIGINAL STORY] This morning, Electronic Arts confirmed that it had bought social-game specialist Playfish for $275 million in cash and up to $125 million more in incentives. At the same time, the company has apparently begun reducing its internal costs by trimming its payroll.
Several sources close to EA have confirmed to GameSpot that the company began extensive layoffs this morning, with one saying the number was in the "hundreds." The layoffs are apparently "company-wide" and are affecting the publisher's internal studio structure, including such shops as EA Tiburon (Madden NFL) and the already downsized EA Black Box (the forthcoming Skate 3).
The company's Redwood Shores, California, headquarters is also being affected, including Dead Space and Dante's Inferno developer Visceral Games. The studio has had a rocky year, with its general manager and COO having defected to Activision's new San Francisco Bay Area studio in July. September figures from industry research firm the NPD Group also found that its Wii-exclusive shooter Dead Space Extraction had a poor debut.
As of press time, Electronic Arts had not responded to requests for comment. However, further comment is likely when the company releases its July-September earnings report this afternoon at 1:30 p.m. PDT. The former top third-party publisher has been struggling of late, reporting a $1 billion annual loss in May and a $234 million quarterly loss in August.